In October 1999, Oregon was one of the first states to adopt a significant improvement in their Condominium and Planned Community regarding capital reserve planning, a process by which homeowner associations and fund future repairs and replacement. For many clubs the binding, although it is an "escape clause" for pre-October 99 Oregon communities.

But there is more planning than to book the law. Where statutes, the Executive Board of the "fiduciary" obligation to kick in. A "fiduciary" is someone who has the confidence and trust of others. The Board has the support of the largest asset that most people own their home. These people have a right to expect the homeowner association, as the company that ... a company is often responsible for millions of dollars in assets.

The reserve study concept was developed in the 1980s as a result of the many aging homeowner associations that were found in Dire Straits by the failure to comply with the rules governing the reserve cost. The homeowners expected the Board to plan for these events and all too many had no plan other than "dealing with it" when the time comes. Well, the "Times" came all too soon and inevitability lived up to its reputation . So, the obvious need for long-term planning was.

Reserve studies analyze and predict the cost and timing of future repairs of components such as roofing association, pool, paving, landscaping, painting, fences, bridges and other objects that have a useful life of 3 to 30 years.

The typical condominium association has 15 to 30 articles that fall under the "reserve" definition. If the repair costs of these 15-30 items are added, it usually amounts to hundreds of thousands, even millions of dollars. This is not chump change. It takes careful planning, the resources and know how and when they spend it. That's what reserve planning.

Reserve plans require that all owners to pay a monthly share of future repairs and replacement. These payments for assets that are used. If an owner sells, the next owner takes the monthly share. All owners pay a fair share and no more special assessments! This is how it should be. If you ever think there is a better way to manage association assets, there is: it is as a reserve study. Whether by law or logic, it is time for your homeowner association started its business as a business.

Neda Dabestani-Ryba is a licensed real estate agent in Maryland. She is a member of the President's Circle of Top Real Estate Professionals. They can be reached at (800) 536-3806 or visit their website for further information: http://neda.dabestani.pcragent.com/

Prudential Carruthers Real Estate Agents is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential Financial. Equal Housing Opportunity.